Federal Direct Stafford Loans
A Federal Direct Stafford Loan is a long-term, low-interest educational loan. Graduate students may apply for up to $20,500 per academic year.
Current Terms
| federal direct stafford/ford loans terms | |
|---|---|
| In-School Interest Rate | 6.8% - Fixed |
| Interest Rate in Repayment | 6.8% - Fixed |
| Origination Fee | 1.5% - deducted from each disbursement; 1.0% upfront rebate = 0.5% net fee (see Upfront Fee Rebate below) as of 7/1/2009 |
| Maximum Annual Limit | $20,500 |
| Subsidized | Up to $8,500 (based on financial need) |
| Unsubsidized | Up to $20,500 minus subsidized amount |
| Lifetime Aggregate Limit | $138,500 |
| Subsidized | $65,500 |
| Unsubsidized | $73,000 |
| Grace Period | 6 months after student ceases to be enrolled at least half-time |
| Standard Repayment Period | 10 years (Other repayment options available to reduce monthly payments) |
Who is eligible to apply?
Students are eligible to participate in the Federal Direct Stafford/Ford Loan Program if they have:
- U.S. citizenship or permanent residency status
- Enrolled in a degree program on at least a half-time basis
- No current default on any previous federal student loan
- Registered with Selective Service, if required to do so
- Not been convicted for the sale or possession of illegal drugs (eligibility may be reinstated based on the date of conviction, number of convictions and successful completion of a rehabilitation program)
How much can you receive?
Most full-time students at BU Law are eligible for the maximum of $20,500 per year in federal loans. Your loan eligibility may be less if your other financial aid (including any scholarships, Veterans’ Benefits, Work-Study and Resident Assistantships), when added to the $20,500 federal loan maximum, would exceed the Student Budget.
Subsidized vs. Unsubsidized
Eligibility for a subsidized loan is based on financial need, as determined by the Free Application for Federal Student Aid (FAFSA). The federal government pays the interest that accrues on the subsidized loan while the student is in school (at least half-time status), during the grace period and during an accepted deferment period
For the unsubsidized loan, the student is responsible for the interest while they are in school and during the grace and deferment periods. The student may elect to make quarterly interest payments while in school, or allow the interest to accrue and have it capitalized (added to the principal balance) before repayment begins.
Entrance Counseling Requirement
If this is the first time that you have borrowed Federal Stafford Loans, you are required to complete an Entrance Counseling Session to inform you of your rights and responsibilities as a borrower. Your loan funds will not be disbursed to the University until you have fulfilled this requirement. Entrance Counseling Session may be completed online.
Direct Loan Master Promissory Note
If you are borrowing Federal Direct Loans for the first time, you must complete a Master Promissory Note online. The Master Promissory Note that you sign will be used for all of your subsequent Direct Loans at BU Law. You will not need to sign a new promissory note for each academic year nor will you sign a new note if you decide to change the amount of your Direct Loan.
Disclosure Statements
The Master Promissory Note does not list the amount of your loans. When each loan is disbursed, you will receive a Disclosure Statement listing the amounts and types of your Direct Loans. You will receive a new Disclosure Statement for each new loan that you borrow, and if any changes are made to the amount of your loans. Be sure to keep your Disclosure Statements as a record of the loans you have received at BU Law.
Improving Your Eligibility for Subsidized Loans
Your eligibility for subsidized loans for the 2009-2010 academic year is based on your 2008 income. If you were working full-time for all or part of 2008, you may not qualify for the maximum ($8,500) subsidized loan. We may be able to increase your subsidized loan amount by recalculating your eligibility using estimates of the income you anticipate for summer 2009 and the 2009-2010 academic year. If you are not eligible for the maximum ($8,500) subsidized loan, please contact the Law Financial Aid office for additional information.
Disbursements
Federal Direct Loans are disbursed via electronic fund transfer and are credited directly to your student account. An origination fee is deducted from the disbursement (see “Upfront Rebate” below). Federal regulations require that loans are divided into two equal disbursements, one for each semester.
If the student terminates or suspends his or her course of study, he or she should contact Boston University immediately for full information regarding rights and responsibilities in meeting this obligation.
Fee - Upfront Rebate
The Direct Loan program offers an up-front rebate of 1.0% of the original principal amount. The rebate will be reflected in the amount of the loan disbursement. An Origination Fee of 1.5% will be charged and 1.0% will be added back as a rebate - for each disbursement. The net amount deducted from each disbursement will therefore equal 0.5%.
The rebate is contingent on the student’s making the first twelve monthly payments on time after graduation. If a payment is late, the amount of the rebate will be added to the principal balance owed. Detailed information about the rebate will be included in the Disclosure Statements mailed to borrowers by the Direct Loan Program.